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KION Group beats expectations for 2019 thanks to a strong end to the year

The KION Group enjoyed another successful year in 2019. It was able to not just fulfil, but exceed its goals.

The Company benefited from steady growth in e-commerce, which is resulting in extensive capital expenditure on warehousing and logistics facilities worldwide. Despite a very difficult market environment, the value of the KION Group’s order intake amounted to a record €9.11 billion in 2019, which was a year-on-year increase of 5.3 percent. The order book saw substantial year-on-year growth and stood at €3.63 billion at the end of the year (up by 10.0 percent). Revenue rose by a healthy 10.1 percent to €8.81 billion. Both operating segments contributed to the increase in revenue. Adjusted EBIT increased by 7.7 percent to €850.5 million. The adjusted EBIT margin stood at 9.7 percent and was thus slightly lower than the corresponding prior-year figure of 9.9 percent.

Net income amounted to €444.8 million, a year-on-year rise of 10.7 percent. The positive trend in net income was one of the main factors behind the increase in free cash flow, which went up by 9.3 percent year on year to €568.4 million.

“We are one of the leading companies in our sector worldwide and, in 2019, we seized our opportunities and continued to press ahead with the KION 2027 strategy despite the challenging market conditions,” said Riske. “Building on our success in 2019, we will be focusing on capital expenditure for the future in the new financial year. We are setting a course for our medium- and long-term growth.”

Contributions from both operating segments made the year a success

In KION’s Industrial Trucks & Services segment (forklift trucks, warehouse trucks, and related services), the brand companies together took orders for 213,700 new trucks in 2019. The slowdown in the market meant that the segment was unable to match the very high figure of 216,700 reported for 2018 (down by 1.4 percent). But the total value of order intake increased by 1.9 percent to €6.33 billion. This growth was primarily due to the expanding service business. Total segment revenue increased by 8.2 percent to €6.41 billion. Adjusted EBIT rose by 6.1 percent year on year to €695.1 million. The adjusted EBIT margin contracted slightly from 11.1 percent to 10.8 percent.

At €2.77 billion in 2019, order intake in the Supply Chain Solutions segment (automated warehouse systems) was 14.3 percent up on the figure reported for the prior year. Total segment revenue rose by 15.7 percent to €2.38 billion, thanks in large part to the strong order book at the end of 2018. Adjusted EBIT jumped by 26.6 percent to €228.1 million. The adjusted EBIT margin improved by 9.6 per cent year on year (2018: 8.8 percent).

KION Group is optimistic for 2020

The outlook for the fiscal year 2020 does not take into account possible effects from global pandemics like Covid-19 or comparable events, as a valid estimate of the resulting effects is not possible due to insufficient data.

The global material handling market is likely to see further strong growth in 2020 if economic conditions stabilize slightly as expected. This is primarily because the fundamental growth drivers will remain intact, particularly the fragmentation of value chains and consumers’ increasing preference for e-commerce.

Following the slight market correction in 2019, the KION Group is expecting new business with industrial trucks in terms of unit sales to hold steady in 2020. The KION Group is in an excellent position from which to take advantage of the continued progress that is expected in the electrification of warehouses. The high number of trucks in operation worldwide provides a sustainable customer base for the service business.

According to the Group outlook, demand for supply chain solutions in the form of warehouse automation is likely to be underpinned once again in 2020 by the high levels of investment in the main customer industries in connection with omnichannel and e-commerce strategies.

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